Legal Research on the Protection of the Rights and Interests of Small and Medium-sized Shareholders: Based on the Response of Two-Tier Shareholding Structure

Abstract

The two-tier shareholding structure, which originated in the United States, has become popular around the world. Unlike the traditional model of “equal shares with equal rights”, the core feature of the two-tier shareholding structure is that the company issues two classes of shares with different voting rights. It enables the concentration and stabilization of corporate control, which has a positive effect on the long-term development of the company and resistance to hostile takeovers. Against the background of the rapid development of the capital market and the continuous innovation of corporate governance structure, the two-tier shareholding structure has begun to be adopted by many enterprises. While this structure can improve the efficiency of corporate governance and promote corporate growth, it also raises a number of challenges. In particular, for small and medium-sized shareholders, their shareholdings may face the problem of limited or no voting rights, as well as the lack of an effective internal and external monitoring mechanism for the company. These issues may lead to the impairment of the rights of small and medium-sized shareholders. Currently, challenges in practice include inadequate laws and regulations, insufficient disclosure of information, and inadequate monitoring mechanisms. Therefore, exploring the path to protect the rights and interests of small and medium-sized shareholders and analyzing their current situation has become an important area in the study of two-tier shareholding structures. This paper starts from the actual situation, analyzes the problems exposed in the operation process of two-tier shareholding structure, and then explores the practical and feasible methods to protect the rights and interests of small and medium-sized shareholders on this basis, with a view to putting forward valuable references for the development of China’s securities market.